Whately joins multi-town electricity aggregate

WHATELY — The selectmen have signed up Whately for the Hampshire Council of Government’s multi-town electricity-buying compact, hoping to get cheaper power for town residents.

One part of the five-year contract signed Monday night — a penalty-free opt-out provision for residents — is what persuaded the selectmen to join the 36-town program after months of reservations. The board had voted to sign the contract in October, but delayed signing until that issue was clarified.

According to the contract, residential customers would be able to discontinue service anytime with no cost or penalty. Businesses, however, would have to pay a fee if they opt-out within 180 days. How much the fee would be is unknown at this point.

Charging businesses a fee to withdraw is an effort to to minimize big fluctuations in demand.

“The way to get cheap electricity is to have a predictable load,” said Hampshire Power’s Executive Director Todd Ford.

The electricity rates will be different for residential and commercial customers, Ford said.

Residents can opt-out any time, while businesses only have the option during the once-a-year renewal period. The town as a whole cannot opt-out during the first five years of the agreement.

The Northampton-based council developed Hampshire Power, a not-for-profit organization, to provide bulk-buying power to towns across Franklin, Hampshire, Berkshire and Worcester counties. Its goal is to offer homeowners and businesses the option to buy power from a utility other than National Grid and Western Massachusetts Electric Co.

When residents receive their bills in the mail, the only noticeable change will be the words HCOG Aggregate instead of WMECO.

It is unknown at this time when Whately residents and businesses will see the change in their bills. The state Department of Public Utilities needs to approve Hampshire Power’s application to sell power to residential customers throughout the region. In the meantime, the town will remain at the default electricity price.

“We can’t do anything until we’re approved by the Department of Public Utilities,” Ford said.

Ford said the first 20 towns that signed on will be approved by the state first. Then the second batch of towns, including Whately, Gill and Northampton, would be approved.

The council plans to provide service to every participating customer at the same time and within six months of the final approval of the Department of Public Utilities.

During the first six months of the program, energy will be purchased by a competitive bidding process that sets a fixed price. Then, the council plans to phase in a price reflective of wholesale energy prices during the month it was used.